What Makes a Strong Startup CEO
23.05.2022
In all the companies I founded and invested in, one thing was always clear about leading a startup — it’s hard. Really hard.
Most Founders won’t come to their startups with years of leadership experience. Yet I’ve seen firsthand that there is a direct link between a Founder’s leadership skills and the outcome of their startup.
The first step in developing your leadership skills is to understand that as a startup CEO, you have two different tasks that may seem like one but are actually different – being a manager and being a leader. And you must excel at both to succeed.
The CEO as Manager
For years now, as I’ve served as a CEO in multiple companies, I kept asking myself the simplest way to understand the CEO’s role. I’ve come to the conclusion that the CEO's role as a manager can be represented by a cycle with five stages:
Defining a strategy — setting the vector (direction) for your company.
Recruiting the right team that is best positioned to execute the strategy.
Setting goals that steer your team in the right direction and then letting them “run”.
Assisting where needed when your team runs into challenges; or, where the goals show they are off course, setting them back on track.
Monitoring progress and periodically reassessing the two initial building blocks – your strategy and your team – to make sure they still make sense and have the perseverance to adjust accordingly & begin the cycle again.
This framework is the essence of a CEO’s responsibilities in managing their company. In a large company, this cycle should be performed at least monthly given today’s fast-changing world; in a startup? Probably weekly. That’s the pace you want to aim for as a CEO.
The CEO as a Leader
Being a CEO is more than just management. While that core of management is important and takes a lot of your time and effort, it’s also important not to get so busy and caught up in that cycle that you lose sight of other big-picture responsibilities.
I see the big-picture leadership responsibilities  — driving people, vision, and culture — as ‘orbiting’ the core CEO role as manager.
The reality is that if you only focus on the management part of being a CEO, you’re very unlikely to build an amazing company. It’s the leadership part that is going to get your company to be the winner because there are many good managers, but very few great leaders. And it should be said that leading a startup is 10X tougher than leading a standard company given the uncertainty and the need to change your direction often.
Leadership is harder to master than management. It takes soft skills and big-picture thinking. But it’s also harder because the best leaders lead by example. It all starts with you. You’re the CEO, you’re the inspiration. You’re the one people look at. You have to become the type of person that you’d want to lead yourself — the type of person whom you would willingly follow.
And while you can recruit managers who are better than you are at their job, it’s very unlikely that your team will ever strive to be better than you in the core leadership area of people, vision, and culture. Why would they even try? And so your example becomes not the basis but the actual ceiling of what you can expect from your team. That’s why leading by example is so critical.
People – Top leaders actually care
Hiring is one of your most important jobs in leading a startup, especially early on when the DNA of your company culture is at stake. Choosing whom to add to your team at this stage has long-term compounding effects on your company. The mantra of the startup world is speed, but hiring is the one area where it pays to take it slow because the cost of mistakes in hiring is much greater than running a failed experiment.
But once people join your team, you have to lead them – which means more than just giving orders.
Though it’s counter-intuitive to many Founders, one of the biggest differences you can observe about top leaders is that they care deeply— about the company, the product, and most of all the people on their team. Top leaders understand that if they care and their team feels it, they’re going to love their work and company. Moreover, it opens the possibility for them to care as well, which will make them better leaders in their own right. So by caring, Founders will quickly see those compounding effects.[Text Wrapping Break][Text Wrapping Break]The thing is that caring is incredibly hard to fake. Demonstrating you care comes in the little things, and if you authentically care, your team will know it subconsciously. Here are two simple, high-leverage things you can do right away to lead people better:
Spend time with people. It’s easy to get caught up in the endless tasks and feel like there’s no time for anything. Carve time out for 1 on 1s. It shows you care, it increases commitment, and it increases your team’s performance. It doesn’t have to be daily or sometimes even weekly, but it is important to make the time.
Listen to your team. As a leader, it’s often best to let your team speak first and listen to what they have to say because once you’ve started your own view, it’s difficult for people to challenge you. Getting the best out of people means not standing in their way, but enabling them to do what you hired them for.
Vision – Leaders have a clear and powerful vision
As a leader, there are several things you can focus on to promote a culture of speed and excellence:
Encourage collaboration. A collaborative team is fast. A team of individuals working alone is slow. That’s just the reality of it.
Push communication & transparency. This is more than just saying you’re transparent. It takes real effort. Without it, your teams will not reciprocate so you will not benefit from them being transparent with you.
Fight complacency. It’s human nature to start getting complacent the minute you start succeeding and growing. Celebrate success but stay paranoid, knowing that complacent startups usually fail.
Promote self-awareness.  Lack of self-awareness is the parent of poor decision-making. You’ve got to create an environment where challenging you (up to a point) is a great thing.
Be optimistic. Be optimistic about your team, yourself, and your chances to win. Without this, it’s hard to get yourself and others to stay motivated.
There’s a lot more to talk about here, and the playbook for how to engrain each of these things in your culture as a leader is something we’ll be sharing in the future as an update to the NFX Company Culture Manual. But as a leader, know that diligent attention to your culture is key.
Leadership is tough, keep learning every day
Every morning in my most recent stint as CEO, I asked myself:
Am I taking my team where they ought to go?
Am I caught up in the rabbit hole of management, or am I actively leading?
Am I leading by example?
And the days I said yes, those were the good days. Being a leader is tough. Being a startup leader is even tougher. That’s why not everyone’s a great Founder or a great leader. It requires a lot of work and attention. You have to keep learning every day to have a chance. But when you nail it, the upside is massive.
Most Founders won’t come to their startups with years of leadership experience. Yet I’ve seen firsthand that there is a direct link between a Founder’s leadership skills and the outcome of their startup.
The first step in developing your leadership skills is to understand that as a startup CEO, you have two different tasks that may seem like one but are actually different – being a manager and being a leader. And you must excel at both to succeed.
The CEO as Manager
For years now, as I’ve served as a CEO in multiple companies, I kept asking myself the simplest way to understand the CEO’s role. I’ve come to the conclusion that the CEO's role as a manager can be represented by a cycle with five stages:
Defining a strategy — setting the vector (direction) for your company.
Recruiting the right team that is best positioned to execute the strategy.
Setting goals that steer your team in the right direction and then letting them “run”.
Assisting where needed when your team runs into challenges; or, where the goals show they are off course, setting them back on track.
Monitoring progress and periodically reassessing the two initial building blocks – your strategy and your team – to make sure they still make sense and have the perseverance to adjust accordingly & begin the cycle again.
This framework is the essence of a CEO’s responsibilities in managing their company. In a large company, this cycle should be performed at least monthly given today’s fast-changing world; in a startup? Probably weekly. That’s the pace you want to aim for as a CEO.
The CEO as a Leader
Being a CEO is more than just management. While that core of management is important and takes a lot of your time and effort, it’s also important not to get so busy and caught up in that cycle that you lose sight of other big-picture responsibilities.
I see the big-picture leadership responsibilities  — driving people, vision, and culture — as ‘orbiting’ the core CEO role as manager.
The reality is that if you only focus on the management part of being a CEO, you’re very unlikely to build an amazing company. It’s the leadership part that is going to get your company to be the winner because there are many good managers, but very few great leaders. And it should be said that leading a startup is 10X tougher than leading a standard company given the uncertainty and the need to change your direction often.
Leadership is harder to master than management. It takes soft skills and big-picture thinking. But it’s also harder because the best leaders lead by example. It all starts with you. You’re the CEO, you’re the inspiration. You’re the one people look at. You have to become the type of person that you’d want to lead yourself — the type of person whom you would willingly follow.
And while you can recruit managers who are better than you are at their job, it’s very unlikely that your team will ever strive to be better than you in the core leadership area of people, vision, and culture. Why would they even try? And so your example becomes not the basis but the actual ceiling of what you can expect from your team. That’s why leading by example is so critical.
People – Top leaders actually care
Hiring is one of your most important jobs in leading a startup, especially early on when the DNA of your company culture is at stake. Choosing whom to add to your team at this stage has long-term compounding effects on your company. The mantra of the startup world is speed, but hiring is the one area where it pays to take it slow because the cost of mistakes in hiring is much greater than running a failed experiment.
But once people join your team, you have to lead them – which means more than just giving orders.
Though it’s counter-intuitive to many Founders, one of the biggest differences you can observe about top leaders is that they care deeply— about the company, the product, and most of all the people on their team. Top leaders understand that if they care and their team feels it, they’re going to love their work and company. Moreover, it opens the possibility for them to care as well, which will make them better leaders in their own right. So by caring, Founders will quickly see those compounding effects.[Text Wrapping Break][Text Wrapping Break]The thing is that caring is incredibly hard to fake. Demonstrating you care comes in the little things, and if you authentically care, your team will know it subconsciously. Here are two simple, high-leverage things you can do right away to lead people better:
Spend time with people. It’s easy to get caught up in the endless tasks and feel like there’s no time for anything. Carve time out for 1 on 1s. It shows you care, it increases commitment, and it increases your team’s performance. It doesn’t have to be daily or sometimes even weekly, but it is important to make the time.
Listen to your team. As a leader, it’s often best to let your team speak first and listen to what they have to say because once you’ve started your own view, it’s difficult for people to challenge you. Getting the best out of people means not standing in their way, but enabling them to do what you hired them for.
Vision – Leaders have a clear and powerful vision
As a leader, there are several things you can focus on to promote a culture of speed and excellence:
Encourage collaboration. A collaborative team is fast. A team of individuals working alone is slow. That’s just the reality of it.
Push communication & transparency. This is more than just saying you’re transparent. It takes real effort. Without it, your teams will not reciprocate so you will not benefit from them being transparent with you.
Fight complacency. It’s human nature to start getting complacent the minute you start succeeding and growing. Celebrate success but stay paranoid, knowing that complacent startups usually fail.
Promote self-awareness.  Lack of self-awareness is the parent of poor decision-making. You’ve got to create an environment where challenging you (up to a point) is a great thing.
Be optimistic. Be optimistic about your team, yourself, and your chances to win. Without this, it’s hard to get yourself and others to stay motivated.
There’s a lot more to talk about here, and the playbook for how to engrain each of these things in your culture as a leader is something we’ll be sharing in the future as an update to the NFX Company Culture Manual. But as a leader, know that diligent attention to your culture is key.
Leadership is tough, keep learning every day
Every morning in my most recent stint as CEO, I asked myself:
Am I taking my team where they ought to go?
Am I caught up in the rabbit hole of management, or am I actively leading?
Am I leading by example?
And the days I said yes, those were the good days. Being a leader is tough. Being a startup leader is even tougher. That’s why not everyone’s a great Founder or a great leader. It requires a lot of work and attention. You have to keep learning every day to have a chance. But when you nail it, the upside is massive.
